NEW YORK (Reuters) - The Nasdaq finished lower on Wednesday as investors sold U.S. technology shares after disappointing financial results from bellwether Intel Corp. and a brokerage downgrade of Cisco Systems Inc.
Intel weighed on all three major indexes. But the Dow and the S&P 500 closed only marginally lower as investors snapped up beaten-down energy shares and a brokerage upgrade lifted shares of blue-chip consumer products maker Procter & Gamble Co.
Intel, the world’s largest microchip maker, said late on Tuesday that quarterly profit fell 40 percent and gross margins would not improve.
In other earnings news, investors were watching for Apple Inc.’s results after Wednesday’s closing bell.
“This will probably be the last quarter you get double- digit earnings growth,” said Malcolm Polley, president of Stewart Capital Advisors in Indiana, Pennsylvania, whose firm owns Intel shares. “What you continue to see in tech is collapsing prices and margins worsening ... Intel beat their numbers, but they warned last night.”
The Dow Jones industrial average slipped 5.44 points, or 0.04 percent, to end at 12,577.15. The Standard & Poor’s 500 Index dipped 1.28 points, or 0.09 percent, to close at 1,430.62. The Nasdaq Composite Index fell 18.36 points, or 0.74 percent, to finish at 2,479.42.
Intel shares dropped 5.7 percent, or $1.26, to $21.04, their biggest one-day percentage fall since mid-July. Apple’s stock lost 2.2 percent, or $2.15, to $94.95.
After Intel, shares of Cisco exerted the second-heaviest downward pull on the Nasdaq. Merrill Lynch downgraded the network equipment maker to “neutral” from “buy.” Cisco shares fell 3.8 percent, or $1.06, to $26.98 on the Nasdaq.
The energy sector, which has taken a hit this month as crude oil prices slid, provided a bright spot for the broader market on Wednesday.
Shares of Exxon Mobil Corp. gained 1.2 percent, or 83 cents, to $72.46 on the New York Stock Exchange.
NYMEX February crude rose $1.03 to settle at $52.24 a barrel. That price, however, is down sharply from its year-end level when NYMEX crude was more than $61 per barrel.
Procter & Gamble gained 1 percent, or 67 cents, to $65.36 after Goldman Sachs raised its rating on the stock to a “buy.”
Economic data on Wednesday showed a stronger-than-expected gain in the Producer Price Index in December and a rise in December industrial production above economists’ forecast.
The 0.9 percent increase in the Labor Department’s overall Producer Price Index weakened the case for the Fed to cut interest rates in the near future, analysts said.
San Francisco Federal Reserve Bank President Janet Yellen said that U.S. interest rates are “within range of the desired setting” but that inflation from a “gangbusters” labor market remains a risk. That point was underscored in the Fed’s Beige Book, a report on regional U.S. economic conditions. The Fed said labor markets are tightening and some businesses are having trouble finding skilled workers.
Trading was moderate on the NYSE, with about 1.53 billion shares changing hands, below last year’s estimated daily average of 1.84 billion, while on Nasdaq, about 2.34 billion shares traded, above last year’s daily average of 2.02 billion.
Advancing stocks outnumbered declining ones by a ratio of about 9 to 8 on the NYSE, while on the Nasdaq, decliners outnumbered advancers by 4 to 3.